Lin Chunping's takeover of Delaware-based Atlantic Bank back in January made news, especially in the businessman's native China, where local media called his business experience “legendary," the Associated Press reported.
There is just one problem: Atlantic Bank doesn't exist.
Chunping, a 41-year-old rice trader from the eastern Chinese city of Wenzhou, fabricated the US bank so that he could then fake acquiring it for $60 million, the Los Angeles Times reported. He claimed that the 85-year-old institution was bankrupt, and he had planned to rename it USA New HSBC Federation Consortium Inc.
The purchase was so lauded that Chunping was even appointed to China's top political advisory body, the Chinese People's Political Consultative Conference (CPPCC), the Telegraph reported.
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Lin admitted in March that he may have overexaggerated his acquisition of foreign banks, but did not yet admit to his scheme, China's Global Times reported. Chinese reporters checked into the supposed purchase and did not find an Atlantic Bank registered in Delaware, nor a bank registration from Lin, according to the AP.
The businessman was was arrested in Guangdong Province on Saturday under unrelated tax-evasion charges after two weeks on the lam from officials, the Telegraph reported. Six of his accomplices are also reportedly in custody, according to the Telegraph.
“People were shocked that an obscure businessman bought a foreign bank and it was a US bank nonetheless. He wasn’t even a banker to begin with,” Zhu Xiaochuan, a researcher on China’s financial law at CEIBS Lujiazui Institute of International Finance in Shanghai, told the AP. “The news must be credible because it was in mainstream media. The public were amazed how wealthy Wenzhou businessmen were.”
The news of Chunping's supposed acquisition also reassured the Wenzhou business community, which at the time was suffering from government-imposed credit crunch that had destroyed some of the city's wealthiest entrepreneurs, according to the AP.
"What Lin had done has brought down the reputation of businesspeople in the city," said Zhou Dewen, the chairman of the Wenzhou Small and Medium-sized Enterprises Development Association, according to the Telegraph.